IFRS Update - EY

1 Ernst & Young ifrs Core Tools April 2012 . ifrs Update of standards and interpretations in issue at 31 March 2012 . Contents Introduction 2. Section 1: New pronouncements issued as at 31 March 2012 4. Table of mandatory application 4. ifrs 1 First-time Adoption of International Financial Reporting Standards Limited Exemption from Comparative ifrs 7 Disclosures for First-time Adopters 6. ifrs 1 First-time Adoption of International Financial Reporting Standards (Amendment) Severe Hyperinflation and Removal of Fixed Dates for First-time Adopters 6. ifrs 1 Government Loans Amendments to ifrs 1 7. ifrs 7 Financial Instruments: Disclosures (Amendment) 7. ifrs 7 Disclosures Offsetting Financial Assets and Financial Liabilities Amendments to ifrs 7 8. ifrs 9 Financial Instruments Classification and Measurement 9. ifrs 10 Consolidated Financial Statements, IAS 27 Separate Financial Statements 10.

2 ifrs 11 Joint Arrangements, IAS 28 Investments in Associates and Joint Ventures 11. ifrs 12 Disclosure of Interests in Other Entities 12. ifrs 13 Fair Value Measurement 12. IAS 1 Presentation of Items of Other Comprehensive Income Amendments to IAS 1 13. IAS 12 Income Taxes (Amendment) Deferred Taxes: Recovery of Underlying Assets 13. IAS 19 Employee Benefits (Revised) 14. IAS 24 Related Party Disclosures (Revised) 14. IAS 32 Offsetting Financial Assets and Financial Liabilities Amendments to IAS 32 15. IFRIC 14 Prepayments of a Minimum Funding Requirement (Amendment) 15. IFRIC 19 Extinguishing Financial Liabilities with Equity Instruments 16. IFRIC 20 Stripping Costs in the Production Phase of a Surface Mine 16. Improvements to International Financial Reporting Standards (issued 2010) 17. Section 2: Items not taken onto the Interpretations Committee's agenda 20.

3 Section 3: Expected future pronouncements from the IASB 26. ifrs Update of standards and interpretations in issue at 31 March 2012 1. Introduction Companies reporting under International Financial Reporting Section 1 provides a high-level overview of the key requirements Standards ( ifrs ) continue to face a steady flow of new standards of each new pronouncement issued by the IASB and and interpretations. The volume of changes to ifrs has been interpretations issued by the Interpretations Committee. This significant and is likely to continue in the foreseeable future. overview provides a summary of the transitional requirements and a brief discussion of the potential impact that the changes The nature of the changes ranges from significant amendments of may have on an entity's financial statements. fundamental principles to some minor changes included in the annual improvements process (AIP).

4 They will affect many This section is presented in the numerical order of the standards different areas of accounting ranging from the presentation of and interpretations, except the AIP. All AIP amendments are financial statements to changes to particular elements such as presented at the end of Section 1. financial instruments and employee benefits. In addition, a table comparing mandatory application for different Some of the changes have implications that go beyond matters of year ends is presented at the commencement of Section 1. All accounting, potentially also impacting the information systems of standards and interpretations are presented in order of their many companies. Furthermore, the changes may impact business effective dates. However, certain standards may contain decisions, such as the creation of joint arrangements or the provisions that would allow entities to adopt in earlier periods.

5 Structuring of particular transactions. When a standard or interpretation has been issued, but has yet to The challenge for preparers is to gain an understanding of what be applied by an entity, IAS 8 Accounting Policies, Changes in lies ahead. Accounting Estimates and Errors requires the entity to disclose any known (or reasonably estimable) information relevant to Purpose of this publication understanding the possible impact that the new pronouncement will have on the financial statements, or indicate the reason for This publication provides an overview of the upcoming changes in not doing so. All such standards, if not early adopted, are standards and interpretations. It does not attempt to provide an indicated in light and mid-grey on the table at the commencement in-depth analysis or discussion of the topics. Rather, the objective is of Section 1.

6 To highlight key aspects of these changes. Reference should be made to the text of the standards and/or interpretations before Section 2 provides a summary of the agenda rejection notices taking any decisions or actions. published in the IFRIC In certain rejection notices, the This publication includes all changes finalised by 31 March 2012 . Interpretations Committee refers to the existing ifrs or The Table of Contents lists all of the changes, which are presented interpretations that provide adequate guidance. While these in the following order: rejection notices are only considered as Level 3 as authoritative literature, they do provide a view on the application of the Section 1: All new pronouncements issued as at 31 March 2012 standards. that are applicable for years ended April 2012 and thereafter. Section 3 considers future expected pronouncements from the Section 2: Items that have not been taken onto the International IASB and Interpretations Committee.

7 If a standard or Financial Reporting Standards Interpretations Committee's interpretation is published prior to the date on which the financial (Interpretations Committee) agenda and the reason for their statements are authorised for issue, an entity will need to comply rejection. with IAS 8 disclosures on standards issued but not yet effective . Section 3: Proposed future pronouncements that are expected to be issued as standards or interpretations based on the International Accounting Standards Board's (IASB) current work plan. 1 The IFRIC Update is available on the IASB's website at +Updates/IFRIC+ 2 ifrs Update of standards and interpretations in issue at 31 March 2012 . ifrs Core Tools Also available from Ernst & Young: This publication details a number of new standards and International GAAP 20122. interpretations that contribute to a significant amount of Our International GAAP 2012 is a comprehensive guide to accounting change in the next three years and beyond.

8 Frequent interpreting and implementing ifrs . It includes standards and changes to ifrs add to the complexity entities face when interpretations mentioned in this publication that were issued approaching the financial reporting cycle. prior to September 2011, and it provides examples that illustrate Ernst & Young's ifrs Core Tools provide the starting point for how the requirements are applied. assessing the impact of these changes to ifrs . Other Ernst & Young publications ifrs Core Tools include a number of practical building blocks that References to other Ernst & Young publications that contain can help the user to navigate the changing landscape of ifrs . In further details and discussion on these topics are included addition to this publication, ifrs Update , they include the throughout the ifrs Update , all of which can be downloaded from publications described below: our website International GAAP Disclosure Checklist Our 2012 International GAAP Disclosure Checklist captures the currently applicable disclosure requirements, as well as those of standards and interpretations that are permitted to be adopted early, for all standards/interpretations that are issued at 31 March 2012 .

9 This tool assists preparers to comply with ifrs in their interim and year-end ifrs financial statements. Good Group (International) Limited Our publication, Good Group (International) Limited, is an illustrative set of financial statements (both interim and annual). incorporating new disclosures that arise from the changes required by standards effective for December 2011 year-ends and June 2012 interim periods. These illustrative financial statements can also assist in understanding the impact changes may have on the financial statements. This publication is supplemented by illustrative financial statements that are aimed at specific sectors and industries. These now include: Good Bank (International) Limited Good Construction (International) Limited Good First-time Adopter (International) Limited Good Insurance (International) Limited Good Investment Fund Limited (Equities).

10 Good Investment Fund Limited (Liabilities). Good Mining (International) Limited Good Petroleum (International) Limited Good Real Estate Group (International) Limited 2. International GAAP is a registered trademark of Ernst & Young LLP. ifrs Update of standards and interpretations in issue at 31 March 2012 3. Section 1: New pronouncements issued as at 31 March 2012 . Table of mandatory application Amendment/New Standard ifrs 1 First-time Adoption of International Financial Reporting Standards Limited Exemption from Comparative ifrs 7 Disclosures for First-time Adopters AIP ifrs 3 Business Combinations Transition requirements for contingent consideration from a business combination that occurred before the effective date of the revised ifrs . AIP ifrs 3 Business Combinations Measurement of non-controlling interests AIP ifrs 3 Business Combinations Un-replaced and voluntarily replaced share-based payment awards AIP IAS 27 Consolidated and Separate Financial Statements Transition requirements for amendments made as a result of IAS 27 Consolidated and Separate Financial Statements IFRIC 19 Extinguishing Financial Liabilities with Equity Instruments IAS 24 Related Party Disclosures (Revised).